Estate Plan for Unmarried or Same-Sex Couples

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What is Estate Planning?

What to do to Prepare Estate Plan for Unmarried or Same Sex Couples

Unmarried couples face special estate planning challenges. An estate plan for unmarried or same-sex couples Same-sex and LGBTQ couples used to have special concerns when creating an estate plan, by virtue of the fact that they couldn’t legally marry in much of the country. However, in 2015, the historic Supreme Court decision in Obergefell v. Hodges made same-sex marriage legal in all 50 states, opening up the legal benefits of marriage to same-sex couples across the country. This change means that estate planning for married same-sex and LGBTQ couples now looks very similar to a traditional married couple. But if you’re not married to your partner, estate planning may be especially urgent for you. There are a few other issues that might remain for some married same-sex couples.

Unmarried Couples Need Special Attention with Estate Plan

First things first. If you’re an unmarried couple, whether you’re LGBTQ or not, creating an estate plan is urgent. An estate plan can ensure that your relationship is recognized after one of you dies. It ensures that the surviving partner has access to many of the benefits of surviving spouses.

What if an unmarried couple, like the majority of Americans, never gets around to doing any estate planning? If one partner were to become incapacitated, the healthy partner has no legal authority for them. They cannot handle the personal, financial or medical affairs of the ill partner. The healthy partner might have to file a court petition to be appointed as the ill partner’s legal guardian. This can be contested by any of the ill partner’s children or other family members. The healthy partner’s lack of legal standing might prevent him or her from gaining appointment as guardian.

If one partner dies without a plan, the surviving partner retains no statutory rights to any of the deceased partner’s property. The laws of intestacy (for people with no established will or plan) usually provide for a spouse, children, and then other blood relatives. A non-married partner would not be in that line of succession.

Estate Plan for Unmarried Couples

Unmarried couples should first ensure that they have well-drafted estate planning documents. This typically include wills or trusts, living wills, health care powers of attorney, and financial powers of attorney. These documents must clearly spell out the role that the surviving partner is to play. That may be as health care agent, executor, trustee, and agent under the power of attorney. Just as important, is designating beneficiaries. Consider if the couple wants the surviving partner to receive some or all of their retirement accounts and/or life insurance proceeds upon the first partner’s death. It is important that the beneficiary designations for these types of assets name the partner as the primary beneficiary.

There is another level of planning when it comes to Medicaid. If one partner seeks Medicaid coverage for long-term care costs, the assets and income of the healthy partner are not counted in determining the Medicaid eligibility of the ill partner. However, unmarried couples cannot freely shift assets between themselves without financial penalty. They also cannot utilize the “spousal refusal.” This technique is available in some states to married couples for protecting the ill spouse’s assets while allowing the ill spouse to qualify for Medicaid benefits.